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Agricultural Sustainability

Cathal O’DonoghueTeagasc Rural Economy and Development Programme

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Overview

Agriculture and Hunger Globally Agriculture and the Environment Biofuels Biotechnology Agriculture in Ireland Sustaining Farm Livelihoods

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Feeding the World

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Malthusian catastrophe

Malthusian catastrophe Return to subsistence

once population growth exceeds agricultural productivity growth

- Malthus (1798), An Essay on the Principle of Population

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3

4

5

6

7

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1950 1970 1990 2010 2030 2050

Bill

ion

s

Source UN

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Percentage Under-nourished

Despite increasing World Population Falling Percentage Under-

nourished

Agricultural Revolution Green Revolution

Science based growth 2%+ cereal yield growth

per annum

Source FAO

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Future Population Growth

However Population continues

to rise More people – 6.5 to 9

billion people by 2050 More food production

– need to double grain production by 2050

Continued pressure

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56789

101112

1950 1970 1990 2010 2030 2050

Bill

ion

s

Constant-fertility variant

High variant

Low variant

Medium variant

Source UN

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World Population95% of World Population Growth in

Developing World

Source UK Food Futures

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Declining Yield Growth

Yield growth declining Soil deterioration due

to overuse of chemicals and industrial pollution

Biggest gains already achieved

Source USDA-ERS

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Declining Hectares per CapitaAlthough number of hectares of

cultivated arable land increased by 10% 1960-2005, Per Capita land

halved.

UK Footprint – 5.4 ha ppChina Footprint – 0.5 ha pp

Source UK Food Futures

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Global Food Price Index

Food Crisis 2008 Price Spike due to Economic Growth Low cereal stocks due to

bio-energy Drought Speculation Policy – export bans

Price Spike 2010 Just starting Russian stop exports of

grain

80

100

120

140

160

180

200

1990 1995 2000 2005 2010

Source FAO

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Under-nourished

Resulted in large increase (150m) in under-nourished Markets and Scientific

Innovation take time to meet market needs

Will we see a return in 2011?

Source FAO

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Food Price Spikes = Civil Unrest

Higher Prices More Riots and Civil

Unrest

Source IFPRI

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Where are the hungry?

Most Hungry in Asia

Higher Proportion in Africa

- Under nourishment not only about production of food – Distribution,

affordability and access to food also important!!

- Sen’s Poverty and Famines: An Essay on Entitlement and Deprivation (1981)

- Under-nourishment still a major world issue !

Source FAO

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Other Pressures

Nutrient TransitionMore wealth – more meatObesity and Malnutrition in same countriesFood Waste – US wastes 27% of food –

enough to feed 80 million people

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Agriculture and the Environment

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The scale of warming depends on emissions:

Low scenario 1.1 – 2.9oC Best estimate 1.8 – 4.0oC High scenario 2.4 – 6.4oCIPCC (2007)

By 2100 Global Temperature is likely to be 1.8 to 4oC Above 1990

Level

Global Temperature

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Impacts of climate change1°C 2°C 5°C4°C3°C

Sea level rise threatens major cities

Falling crop yields in many areas, particularly developing regions

FoodFood

WaterWater

EcosystemsEcosystems

Risk of Abrupt and Risk of Abrupt and Major Irreversible Major Irreversible ChangesChanges

Global temperature change (relative to pre-industrial)0°C

Falling yields in many developed regions

Rising number of species face extinction

Increasing risk of dangerous feedbacks and abrupt, large-scale shifts in the climate system

Significant decreases in water availability in many areas, including Mediterranean and Southern Africa

Small mountain glaciers disappear – water supplies threatened in several areas

Extensive Damage to Coral Reefs

Extreme Extreme Weather Weather EventsEvents

Rising intensity of storms, forest fires, droughts, flooding and heat waves

Possible rising yields in some high latitude regions

Source IPCC

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Land Cover Only 23% of arable land suitable for rain fed agriculture

Limited capacity for extra cultivated land – need yield growth

to increase production

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Climate induced percentage change in Climate induced percentage change in production in 2050: production in 2050: Rainfed maizeRainfed maize

Source: IFPRISource: IFPRI

Climate Change:Global production: -16%

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Water Scarcity 2000Water Scarcity 2000

1/3 of the world’s population live in basins that have to deal with water scarcity Source: Comprehensive Assessment of Water Management in Agriculture, 2007

Significant Water Pressure1kg Meat – 15m3 water

1kg Grain – 0.4-3m3 water

More food production – need to double grain production by 2050 - More water for food – if practices

don’t change, water needs double

Irrigation important however much water is not drained from sustainable sources (e.g.

groundwater)

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Biofuels

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Food and Energy

Food and Energy Prices linked As input to food

production As a substitute for oil

Bioenergy crops

Source: IFPRI

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Bio-fuel consumption High oil price (Plus subsidies)

Land use change to increase bio-fuel production

Objective – reduce Carbon Emissions via sequestration when growing

However Land use change, fertiliser use and

other energy inputs may result in higher emissions than fossil fuels

Substitution of land from food and feed reduce food supply and can increase world food prices

Waste from Forestry and Animal processing more efficient in Ireland

Source UK Food Futures

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Biotechnology

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Biotechnology

Selective Breeding 1000’s of years improving breeding

Genetic Analysis - Genomics Understanding traits associated with genetics can

lead to improved breeding and performance

Genetic Modification Specific changes introduced into their DNA by genetic

engineering techniques

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Genetic Modification

Pest Resistance Reduces need for pesticides

Herbicide Tolerance Reduces costs associated with weeding

Cold Tolerance Resistant to frost

Water Tolerance Allow for higher crop yields in areas of higher or low

moisture levels

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Genetic Modification

Concerns Cross-contamination Uncertainty and risk in relation to

health due to relative recent introduction

As technologies are patented, there is a shift from public good provided research to profit making, increasing economic strength of multi-nationals

Currently not grown in Ireland However GM products used in

many food stuffs GM Maize grown in 7 EU

countries – Spain has biggest share

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Agriculture in Ireland

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Agri-Food in Ireland

Relatively small primary sector ~ 2.5% GDP However important component of processing sector

~ 7% Main Sectors

Beef, Dairy, Sheep, Pigs, Tillage Most food exported

Agri-food and bio-economy sector a major source of net export earnings Given largely Irish ownership with profits kept in Ireland, Better domestic connectivity and so fewer imports, 16% of exports, BUT 32% of net earnings (Riordan, 2008)

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1000011000120001300014000150001600017000180001900020000

1994 1999 2004 2009

05000

100001500020000250003000035000400004500050000

Dairy

Dairy

&Cattle

Cattle

Rea

ring

Cattle

Oth

er

Sheep

Tillag

e

40

60

80

100

120

140

160

2003 2005 2007 2009 2011

Milk Consumer Price Milk Producer Price

Family Farm IncomeFamily Farm Income by Sector

Market Power?

Economic Issues in Agriculture

60

80

100

120

140

160

180

1994 1999 2004 2009

Ag Output Price Ag Input Price CPI

Cost Price Squeeze

Source: Teagasc National Farm Survey

Source: CSO

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Animal Production and the EnvironmentClimate change – minor to positive

impact on Irish AgricultureAgriculture can also impact on

environment.

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Contribution to GHG’s

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Agriculture a Significant Contributor

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However

Global Food Security Should Ireland reduce agricultural output?

Carbon Leakage If we reduce, will there be any positive impact if more rainforest is

converted to food production? Incidence of Emissions

Production or Consumption

On-farm mitigation measures Relatively low stocking rate more intensive agriculture combined with

new forestry However cannot currently offset land use changes against agricultural

emissions

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Marginal Abatement Cost(Economy)And target the many options where negative or low marginal abatement costs exist

Many other less costly (and beneficial) remedies should be exploited before reducing herd

Source: McKinsey/SEAI

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Nitrogen

Nutrients required for sustainable agricultural production

However, Excess nutrients in soil (fertiliser and/or manure) can have negative implications for water quality and climate change

(N2O)

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Fertiliser Use - NFertiliser Use - P

Reduced Fertiliser Usage

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Farm Interventions

0

0.2

0.4

0.6

0.8

1

1994 1999 2004 2009

Investment in Farm Buildings and Improvement

Grants

Source: Teagasc National Farm Survey

0

0.1

0.2

0.3

0.4

0.5

0.6

1994 1999 2004 2009

Average Investment on Farms as a % of Farm Income

Proportion of Farms in REPS

Prohibited Periods

Significant policy induced interventions- Investment in Facilities- REPS - Calendar Farming- Nitrates Directive

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Sustaining Farm Household Incomes

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Viable Farms without subsidies(Farm Income > Min Ag Wage + 5% Return on Assets)

0

0.1

0.2

0.3

0.4

0.5

0.6

1996 1998 2000 2002 2004 2006 2008

Viable Viable (No Subsidies)

Declining proportion (40% in 1996 to 19% in 2009) of farms are viable - ie can generate income equivalent to minimum agricultural wage ~ €17.5k + 5% return on Assets- A further 40% are sustainable with off-farm employment- Without subsidies like NZ, less than 2% of farms in 2009 (7% in 2008) would have been viable- A further 52% are sustainable with off-farm employment

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Farm Viability

Viable

Sustainable

Income Challenged

ViableComprises 25% 43% Dairy, 30% Cattle, 15% Sheep, 11% Tillage 13% over 65 Commercial end of sector On-farm business needs

SustainableComprises 35% 11% Dairy, 65% Cattle, 17% Sheep, 7% Tillage 5% over 65 Multi-income sources On-farm and Off-farm needs

Income ChallengedComprises 40% 25% Dairy, 53% Cattle, 16% Sheep, 6% Tillage 41% over 65 Severe Income issues Income Generation Needs

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Thank You!